How Does Marriage Affect Estate Planning? – How does marriage change your long-term financial and estate planning situation? First of all, simply getting married doesn’t mean your property is jointly held or will go to your spouse upon your death — it’s a complicated situation. If you’re in a community property state, for example, money earned or assets purchased during marriage are presumed to be community property and each spouse has a 50% interest unless a will says otherwise. However, property you owned before marriage is separate and remains so unless you make a gift of it.
But whether you’re in a community property state or not, you’ll need to make a provision for how you and your new spouse will want your assets distributed on death. If you have no children, you may want your assets to go to charities you both agree on or to be distributed equally to surviving relatives.
In the case of a marriage that involves children from a previous marriage, things get more complicated. You need to provide for your children while taking into consideration the needs of your new spouse.
Here’s why you shouldn’t put off estate planning now — you can consider it an act of love for your family because you don’t want them to be left with a mess. Here are some of the legal documents to reflect the important change in your lives:
Update your will.
- Add your new spouse as a beneficiary.
- Add or remove any property that was gained, lost or consolidated in the marriage.
- You can make your spouse the executor of the new will or name someone else.
- If you have an existing will, you can add a codicil to update it without writing a new will.
Update or create trusts and other documents.
- You can amend your living trust or write a new one to leave property to your spouse and other recipients. You and your spouse may wish to set up a joint living trust. You’ll want to determine who manages your living trust.
- Let your spouse know your wishes for end-of-term health care. Your spouse will be able to decide on your behalf when you are unable.
- Review your power-of-attorney situation: You and your spouse may want to take on this responsibility for each other.
Take a look at your insurance policies.
- Reevaluate your life insurance, health care insurance, and homeowner’s or renter’s insurance.
- Take inventory of your combined assets. You might be able to get better rates now that you’re married.
Many newly married couples put off estate planning for several reasons: You think you’re too young and healthy to consider such things, or you think you can’t afford it and anyway, you have no children yet. You may think it’s too depressing to think about the possibility of dying at such a happy moment, but estate planning for newly married couples is a responsible, thoughtful and loving thing to do.
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